A firm with highly unpredictable sales revenue would best choose ________ funding strategy to minimize risk.
A) the aggressive
B) the conservative
C) the trade-off
D) a seasonal

Question

Quizplus · Accepted Answer

A firm with highly unpredictable sales revenue should choose a conservative funding strategy to minimize risk. This means relying more on debt financing and keeping a larger reserve of cash to have a cushion for any financial shocks. This approach may limit the potential for growth, but it also reduces financial risk and provides stability in uncertain times. The other options (aggressive, trade-off, and seasonal) may not adequately address the unpredictability of sales revenue and could lead to further financial strain for the firm.

A Firm with Highly Unpredictable Sales Revenue Would Best Choose